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Canada is a great place to retire

Commentary: Fidelity executive gives 10 reasons to head north

By

BillMann

VANCOUVER, B.C. (MarketWatch) — With all the bad economic news and dire predictions about government retirement trust funds swirling around Boomers, Fidelity’s Peter Drake has come up with soothing words for retirees here. He’s even written a Top 10 list of reasons Canada is a good place to retire.

The upbeat speech he gave here recently is getting plenty of play in Canadian media.

Vancouver, British Columbia, is a nice place to retire.

“Everywhere you turn these days, you can find headlines about the slowing global economy, the need to work longer, underfunded pensions and how Canadians are not saving enough for retirement. While there may be truth in these views, they often sensationalize the actual situation,” said Drake in a Vancouver speech recently. “What we don’t read enough of is that Canada is one of the best places in the world to retire. Look at our solid economic position, our health-care system and the demand for older workers.”

His speech could even cause older Americans to think about heading north to retire instead of the opposite, more traditional direction. .

Drake, vice president of Fidelity’s Canadian retirement and economic research, worked for over 30 years as an economist at Toronto Dominion Bank. He’s crunched the numbers, and says that things don’t look that dire for prospective Canadian retirees.

Addressing the Canadian Institute of Financial Planners’ annual national conference here recently, Drake’s speech was called, “The Shift to Retirement Income: Beyond the Headlines.” He urged the financial advisors assembled and their clients to put all the negative news about Europe, etc., in context and not to become paralyzed with fear.

Drake is no David Letterman, but his Top 10 list was current and topical, stressing Canada’s strong position compared to other countries (e.g., the one just south) in regards to health care and the strength of Canada’s national retirement system.

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The Canada Pension Plan has been audited and is predicted to be solvent for another 75 years, something that would be sweet music to Americans’ ears who have been hearing politically motivated allegations about Social Security’s solvency.

Fidelity’s research, Drake noted, shows that the average American should save $240,000 for medical expenses in retirement. But he added that’s not a cost that Canadians, who are fully insured for basic health care, have to face. (They are, however, responsible for 30% of other health-care costs, which Drake says they SHOULD plan for).

On his Top Ten retirement list, Drake also mentioned Canada’s rising housing prices, which have built up equity for older Canadians, increasing their net worth.

Drake then cited the strength of Canada’s banking system — the country had no housing crash or sub-prime mortgage disaster. He said the strong record of the Bank of Canada of keeping inflation low and predictable is a big plus for retirees, who are affected by inflation more than any demographic group, of course.

The Fidelity retirement expert also noted on his list that Canada’s labor market provides strong opportunities for older Canadians: Fidelity’s research, he said, has found that 79% of pre-retirees expect to work at least part-time in retirement, and also, that older Canadians are working in record numbers past retirement age.

Their reasons for working in retirement, Drake said, are counter-intuitive: They’re NOT purely financial. Top reasons Fidelity research found included the desire to stay mentally or physically active, and keeping busy to help pass the time.

On the demand side, employers in Canada are increasingly looking to older workers to provide much needed experience, Drake said. .

And life expectancy in Canada in among the highest in the world; it recently soared just north of 80 for the population overall.

Finally, Drake gave the reason I’d list most prominently: That Canada is a great place to live.

It’s got clean water, beautiful scenery, few handguns and incredibly safe neighborhoods, as I am reminded every time I come up here. It feels as secure as the U.S. did when I was growing up in America. (Canada has some crime, sure, but crime and gun violence are small compared to the States.)

I’m approaching Social Security age, and I always feel safer and more secure in Canada than when I return south of the border. That kind of security and peace of mind you can’t get even with a big retirement nest egg.

In all fairness, there’s one downside not mentioned by Drake about Canada — and it’s not related to retirement planning or savings:

I would NOT want to retire in most of Canada simply because of the lousy weather. Except, that is, for Vancouver and Victoria, in temperate British Columbia. I endured seven years of brutal Montreal winters, and it was tough, even when I was a young man. Toronto’s winters are often rated as bad as Chicago’s.

Sleepy Victoria is Canada’s retirement mecca. As a Victoria friend told me, “It’s the Clearwater-Dunedin of Canada. It’s where Canadians, Brits and Scots come to die.” Canada’s version of God’s waiting room is lovely and pleasant, and the weather is rarely bitter and cold, as it is in Edmonton, Montreal, Toronto, Regina, Halifax, etc.

Some locals with a mordant sense of humor call Anglophilic Victoria, “The top layer of a British graveyard.”

Weather does count for retirees, and one Toronto newspaper columnist, writing about Drake’s speech and his emphasis on sound financial planning ahead of retirement, adds a sentiment many Canadians would heartily endorse:

“Extended winter vacations in the sun are still a non-negotiable part of MY retirement plan.”

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